Strategic commercial interventions - initiating companies in public ownership: standard operating procedures - part 2

Annex 1

Financial metrics might include, for example (but not limited to):

• Operating Cash Flow
• Working capital
• Total Asset Turnover
• Net Profit Margin

Contract Management and Third-Party Risk metrics might include, for example (but not limited to):

• % company invoices disputed of total invoices issued over a prescribed timescale, and % change compared with prior timescale.
• Number of customer helpline calls over a prescribed timescale, by type, and % change compared with prior timescale.
• Feedback from customer satisfaction surveys according to the metrics used in such surveys (including factors such as satisfaction ratings and length of customer relationship).
• Number of new customers over a prescribed period, and % change compared to prior period.
• % of total revenue from repeat business within prescribed timescale, and change compared to prior period.
• Number of current transactions or contracts with high-risk parties (which need to be defined) and % change compared to prior date.
• Number of current contracts above (or consistently just below) specified threshold amount (which should be defined, for example, the internal approval threshold), and % change compared to prior date.
• Number of policy exceptions approved over a prescribed timescale, and number involving high-risk parties (which need to be defined).
• Number of deals or transactions rejected by the company due to compliance concerns over a prescribed timescale.
• Number of contracts with requirement to report known or possible compliance-related violations or breaches, by category of breach, and % change compared to prior timescale.
• Number of third parties that passed and failed due diligence process over a prescribed timescale.
• Number of conflict-of-interest disclosures made by company employees and third parties within a prescribed timescale, by context (for example, during procurement process) and % change compared to prior timescale.
• Value of funds misallocated by the company in error and reversed during a prescribed timescale, and % change compared to prior timescale.
• Number of third-party contract breaches declared by company over a prescribed timeline.
• Number of company contract breaches declared by third-party over a prescribed timeline.

ESG metrics might include the examples set out below under the relevant headings.

Environmental Metrics

Progress against targets for the following, over a prescribed timescale and % change compared to prior interval:

• greenhouse gas and carbon emissions.
• emissions to air, land, and water.
• other environmental targets related to supplier environmental compliance.
• % change in energy used by the company’s premises and facilities (consider extending to supply chain).
• % use of renewable energy across company’s premises and facilities (consider extending to supply chain).
• Business mileage across the company per annum, and % change on prior year.
• Recycling rate across the company’s operations, over a prescribed timescale.
• Changes in volume of water usage across a prescribed timescale.
• Progress towards biodiversity targets or targets for ecosystem services over a prescribed timescale.
• % products sustainably sourced or manufactured over a prescribed timescale, and
• % change compared to prior timescale.
• Total annual spend on product safety, and as a % of total revenue.
• % hazardous and non-hazardous waste produced over prescribed timescale (consider extending to supply chain).
• Changes to volume of packaging material produced over prescribed timescale (consider extending to supply chain).
• Environmental fines incurred by the company over a prescribed period, and % change compared to prior period.

Social Metrics

• % board members with specified characteristics, such as those relating to race, nationality, age, disability, sex, gender, sexual orientation, and employment status, and compared to industry benchmarks.
• % employees engaging with company wellness initiatives over a prescribed timescale.
• % current suppliers examined for high-risk labour conditions (including child labour, forced labour and modern slavery, poor health and safety or high injury rate) over a prescribed timescale:
• number of suppliers identified as high-risk;
• number of suppliers meeting specified supply chain standards;
• number for which remedial action taken;
• number of supplier relationships terminated due to failure to meet specified supply chain standards.
• progress against targets related to supplier social compliance.
• CEO, ethnicity, and gender pay ratios.
• % current suppliers with company-compliant code of conduct in place.
• Changes to number of community volunteer hours logged by company employees over a prescribed timescale.

Governance Metrics

Number and frequency of engagement with stakeholder groups (including employees, suppliers, and customers):

• type of engagements;
• topics covered in engagements.
• Outcome of board performance evaluation (using metrics used in the evaluation).
• Number of board committee meetings held, and attendance figures relating to individual members.
• Research and development costs or expenses per annum, and as a % of total revenue (and % change compared to prior period).

Status of compliance with relevant sections of applicable corporate governance code.

Other areas of metrics may also comprise of:

• Data privacy
• HR
• Anti-Bribery